Africa-Press – Mauritius. African institutional investors are sitting on $1.1 trillion in capital that could finance the region’s long-term infrastructure needs and power industrial growth, the Africa Finance Corporation said Thursday.
Pensions and insurance companies, sovereign wealth funds and public development banks are still channelling funds into “low-risk and short-term instruments instead of being channelled into the real economy,” according to the multilateral lender’s 2025 State of Africa’s Infrastructure Report.
The AFC estimates that $455 billion of the capital sits in pension funds, while $150 billion is held by sovereign wealth funds. Together with commercial bank assets and foreign currency reserves, the continent holds some $4 trillion in domestic capital, the lender said.
Still, most African nations lack the regulatory clarity and financial instruments needed to redirect capital flows, the AFC said, adding that the vacuum is one of the biggest barriers to mobilising domestic capital at scale.
South Africa, Nigeria and Kenya are among a small group that have begun to align savings with development needs, the lender said. Still, progress is slow. Nigeria’s pension exposure to infrastructure has grown from less than 0.02% to 1% of total assets since 2017.
Many countries on the continent still lack critical investments in energy, rail and transport. In 2024, Africa added just 6.5 gigawatts of grid-connected electricity from all sources — compared to over 18 gigawatts from renewable energy alone in India, the lender said.
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